Glossary · Doing the deal
Asset Seizure(Foreclosure)
In short
This is when a lender takes possession of assets pledged as collateral due to loan default. It's a last resort to recover their funds.
What it means in a deal
If you default on your SBA loan, the lender has the right to seize and sell the business assets you pledged as collateral. This is why understanding collateral requirements and your personal guarantee is critical. Ensure your business can reliably generate the cash flow needed to avoid this scenario.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Asset Seizure
- What is the difference between an asset and stock purchase in a buyout?
- How does a recent significant personal asset purchase affect my SBA 7(a) loan application?
- What if the business I'm buying has intellectual property (e.g., patents, trademarks) as its main asset?
- How does an SBA 7(a) loan address the financing of intellectual property as a major business asset?
- Can an SBA 7(a) loan be used to purchase a business where goodwill is the primary asset?
- When is personal real estate required as additional collateral for a 7(a) loan with a business asset shortfall?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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